POLAND Trends and Developments Contributed by: Radomił Charzyński, Kamil Majewski, Olga Durawa and Filip Widuch, Greenberg Traurig LLP
ble. Although the logistics market experienced a slowdown in 2023 compared with the previous two years, newly completed industrial and logis - tics space reached 3.7 million square metres – the second-highest result in history. With such a result and considering the almost 3 million square metres of space under construction, Poland is one the fastest-developing countries in Europe in terms of industrial and logistics supply. Total leasing activity was higher than expected and stood at 5.7 million square metres, con - stituting the third-highest recorded level in the history of the market (only 15% lower than in 2022). 2023 also brought some landmark trans - actions on the leasing market. Specifically, three new transactions for space exceeding 100,000 square metres were signed in Warsaw, Silesia and Wrocław. In 2023, industrial and logistics transactions accounted for 51% of the total investment mar - ket in Poland. This includes a transaction in which Nrep acquired 80% of shares in one of the leading logistics developers and investors in Poland, 7R. In 2023, as in previous years, the construction of many projects began as a result of co-operation between fee developers (provid - ing know-how and co-ordination/management of the construction and leasing of the project for a fee) and passive investors (providing the equity) on the basis of development manage - ment agreements. Some market players with the capacity to both invest equity and develop projects independent - ly have decided to act as fee developers in some new projects avoiding the land/construction risks. The new pricing reality has encouraged some of those logistics developers whose busi - ness is to keep assets in operation to acquire standing assets rather than develop assets inde -
pendently. Given the rising development costs and limited availability of land in attractive loca - tions, acquiring standing assets has become an attractive alternative for many of these develop - ers. 2022 accounted for unprecedented rent increas - es of approximately 20‒30% in the logistics/ production market. Given the relatively high availability of new space and stabilisation of construction and financing costs, it is expected that in 2024 – as in 2023 – rents are expected to remain stable and no significant rental increases are forecast. Currently, headline rents in prime locations stand at EUR5.5 per square metre per month and average EUR4.4 per square metre per month. As companies active in the market – both from the e-commerce and production sectors – extend their supply chains and many new com - panies enter the market relocating their produc - tions capabilities to Poland, there is a constant demand for logistics and production space. Owing to the high demand for out-of-home parcel delivery services, Poland is currently the regional leader in e-commerce, with a 4% share in the total European e-commerce spending. In contrast to other CEE and Western countries, the e-commerce share in total retail spending is currently higher than during the closure period, and this trend continues to grow. The above-mentioned trend is expected to increase as many companies decide to locate their production facilities in Poland – ie, closer to their sales markets (nearshoring/friendly shor - ing) – owing to disruption in the supply chain related to the COVID-19 pandemic and the war in Ukraine. This can already be seen in the mar - ket. Poland, with its still relatively low labour costs and good transport links, is considered
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